ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A mutual fund distributor is one who helps in buying and selling of mutual funds in India for its investors. The mutual fund distributors earn commission by bringing in investors to the mutual fund scheme. They also advise the investors about the various schemes of different mutual fund houses.

Detailed explanation-2: -Every mutual fund house treats distributor commission as part of its expense ratio, calculated collectively with similar expenses like marketing and accounting. The fund house factors in the total assets under management (AUM) annually, which comprises lump-sum investments and the total SIPs for the year.

Detailed explanation-3: -Your mutual fund agent will receive it whenever you invest newly. This commission varies from product to product, high in ELSS funds (around 4.5% to 1%), equity schemes (around 0.5% to 2.5%) and low in debt funds (around 0.2% to 0.8%).

Detailed explanation-4: -A Mutual Fund Agent is a qualified professional who advises & assists investors on investing in mutual fund schemes. The Agent would make money in the form of earning commissions from the fund house or distributors on the selling of mutual fund schemes.

Detailed explanation-5: -Definition: An individual or an entity facilitating buying and selling of units of mutual fund by investors. A distributor earns upfront/trail commission for bringing in investors into the mutual fund schemes.